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The Taylor Review of Modern Working Practices published in July 2017 recommended (amongst other things) that there be a ‘naming and shaming’ scheme for employers who do not pay Employment Tribunal compensation awards made against them within a reasonable time-frame. In December 2018, the Department for Business, Energy and Industrial Strategy (BEIS) announced that it would be implementing this recommendation.
Unpaid Employment Tribunal Compensation Awards – The Naming & Shaming Scheme
The naming and shaming scheme will apply to all tribunal awards of £200 or more, which have been registered with BEIS on or after 18 December 2018. It runs alongside the existing financial penalty scheme, where tribunal awards remain unpaid 42 days after the date of an Employment Tribunal decision.
Claimants must register with both the naming and financial penalty schemes for their employer to be eligible for naming and shaming. Once an enforcement officer has verified the claim, a warning notice will be sent to the employer, giving them 28 days to pay the award before a penalty notice is issued ordering the employer to pay a penalty of 50% of the unpaid award (subject to a maximum limit of £5,000) and 8% interest per annum.
A naming notification letter will be issued at the same time as any penalty notice, advising that the employer will be named online unless they submit valid representations within 14 days. Representations will only be accepted if they meet at least one of the following criteria:
- Naming could lead to personal harm to an individual, their family or employees;
- Naming could give rise to national security risks;
- Naming would not be in the public interest; or
- The award has been paid in full (and valid proof of payment submitted).
If BEIS do not accept the representations made, the employer will be named by means of a BEIS press release published quarterly on the gov.uk website. The details published will include the employer’s name and the amount of the unpaid award.
The introduction of the naming and shaming scheme follows a series of measures aimed at increasing transparency in the Employment Tribunal, including the introduction of the Employment Tribunals online database of decisions. This is a public record of cases issued in the Employment Tribunal, which contains the names of the parties and, in most cases, the outcome.
How Nelsons Can Help
For further information or to comment on this article, please contact a member of our Employment Law team in Derby, Leicester and Nottingham on 0800 024 1976 or via our online form.